eBusiness Weekly
Among the many welcome reforms in the Ministry of Health and Child Care over the last few months has been the remarkable change in the National Pharmaceutical Company, NatPharm, which has moved from being the subject of several corruption investigations with top managers and a former Health Minister now all out on bail, to an entity that is setting examples of how to do procurement, even in emergency situations.
Covid-19 caused a lot of procurement problems around the world, with a whole batch of new supplies and new equipment needed in every country, and sometimes needed almost instantly. Some countries managed better than others.
Recent investigations in, for example, Britain, have shown that country has not managed the process particularly well. More than £18 billion of contracts related to Covid-19 have been awarded, with £1,5 billion of these to companies connected to top Conservative supporters, and by supporters we mean people who donate large sums to the party.
And among these contracts are some awarded to companies that need to use a dictionary to find out what words like “mask” or phrases like “personal protective equipment” mean before they supply such goods.
No one has yet been arrested over what a Guardian columnist described as a “chumocracy” but it has been discovered that a company with a reference from a political figure had a 10-times better chance of being awarded a direct contract than one without, purely because, of course, the reference meant that there had been some pre-screening, if only by a politician.
If Zimbabwe had followed that route we could have expected some vicious articles mind you. But still.
The problem for everyone is that competitive tenders are seen as taking too long to put out and adjudicate when stuff is needed very quickly, so in many countries there have been negotiated prices and direct contracts. Zimbabwe was starting to drift down that route with the biggest potential such deal being blocked before any money changed hands and a whole bunch of arrests and court cases.
The Zimbabwe procurement system potentially offers a better route, and NatPharm has embraced this, managing according to one report to float and adjudicate a competitive tender in well under a fortnight for essential chemicals and items.
The major reform in Zimbabwean procurement was to set up the Procurement Regulatory Authority of Zimbabwe, and to then make sure that this authority does not award tenders. What the authority does is list companies that have expressed interest in supplying the Government, local Government and parastatals.
So the real detailed checking is done in advance. Someone can find out if the company is registered, and for how long; tax returns can be checked; it can be confirmed that the directors exist and are neither in jail nor out on bail; and it can be verified that the company has premises significantly larger than a briefcase or even the boot of a car.
NatPharm has gone further than most entities. It now lists in the Government Gazette who has expressed interest as a supplier for the stuff it needs, so anyone out there can glance through it, wonder why they were excluded, and wonder why what’s-his-name was added to the list. But by publishing, NatPharm are making a statement that the dubious types are already missing.
During the investigation in potential conflict of interest by Deputy Minister Chamunorwa Mangwiro, an investigation that will probably clear him although with a few sniffs as no instructions were given or money paid out, the emergency tender procedure used by NatPharm for one contract was laid out.
The tender was floated with companies given 48 hours to put in their offers. This is where pre-clearance and listing of what companies are interested in supplying is useful.
Someone can simply check and list all the companies that have been pre-cleared and claim they can supply and send them a copy of the tender. Twenty-three companies replied, which gives a lot of competition, even when not all companies could supply all items. The adjudication was then done in eight days, with the adjudicators working through a weekend. A final list based on price and delivery dates was made and contracts awarded.
And most interestingly the final total cost was less than half what a direct negotiated contract might have cost.
So NatPharm managed to use a proper tender system, with competitive bids, but by speeding up the offer and adjudication periods managed to get what they needed in time. Even emergency supplies can be properly bought for the best price.
The other reform NatPharm has now made, is to gazette the shortlists of suppliers, so gain everyone can see and its business dealings move from the boardroom to the public domain. Because of the need for speed, some of this gazetting has been done with extraordinary Government Gazettes, those not published with the normal pile of notices on Fridays, but that appears again to be a trivial extra cost to have public accountability.
The final step in Zimbabwe’s procurement system is the back-up from the Treasury. The Permanent Secretary has to certify that the contract gives value for money before authorising a payment. That was used over one potential major contract, which the Treasury sank when it did a routine check.
The system of using three totally independent bodies, the procurement authority, the actual unit that wants to buy the stuff, and the Treasury spreads out critical areas of decision making, making corruption very difficult, but as NatPharm showed does not hinder emergency procurement.
Other steps Zimbabwe took from the beginning was to use universities to make basic protective equipment and mix up the sanitisers. For a start, State universities cannot have secret accounts, and secondly there is a no one to scoop the profits. A Vice Chancellor cannot take a cut. Secondly there was security in the sanitiser production. The basic ingredient in sanitisers is ethyl alcohol, the same basic ingredient in all alcoholic drinks. It gets poisoned and made to taste awful in the mixing process, but you still want the raw materials locked up with someone you trust holding the key.
President Mnangagwa, with his long experience in politics, put out a mild warning to those who were thinking that a “chumocracy” was possible in Zimbabwe. A lot of companies responded to the Government’s plea for support. And the Government was very grateful for that untied national effort. But the President did casually note that handing around photos of a company boss shaking hands with the President was not really a good idea, and while he was grateful for support this would not change the procurement system.
All of this does not mean we can relax in Zimbabwe. We have to be on our guard against corruption and “jobs for the boys”. But when someone like NatPharm can take a deep breath and move right up the scale, to the stage where it is setting examples, it means that reforms are possible.
